f the MPC in an economy is 0.75, government could close a recessionary expenditure gap of $300 billion by cutting taxes by Multiple Choice $400 billion. $300 billion. $75 billion. $225 billion.
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- If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200 billion by cutting taxes by?If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of S80 billion by cutting taxes by • $100 billion. S80 billion. $20 billion. $64 billion.If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $80 billion by cutting taxes by $100 billion. $80 billion. $20 billion. $64 billion.
- An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4 billion. The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.suppose the government wishes to illuminate recessionary GAP of 100 billion and the MPC is .75. How much must the government increase in spending instead of increasing government spending by the amount you calculated what would be the effect of the government decreasing taxes by this amount explain?suppose the government wishes to eliminate a recessionary GAP of 100 billion and the MPC is .75. How much must the government increase in spending instead of increasing government spending by the amount you calculated? What would be the effect of the government decreasing taxes by this amount explain?
- Suppose the MPC = 0.8 and the government increases spending by P100 billion, financing this spending with a P100 billion tax increase. Which of the following will be the likely effect of this action? a. Real GDP will expand by P100 billion b. Real GDP will contract by P100 billion c. Real GDP will expand by P500 billion d. Real GDP will expand by P400 billionIf MPC = 0.5, a simultaneous increase in both taxes and government spending of $20 will a. decrease GDP by $20 b. increase GDP by $20 c. decrease GDP by $40 d. increase GDP by $40Assume that initial GDP is $1,000 and we want to expand it to $1,600. Average MPC for the country is 2/3. What should be the new level of government spending if the initial level is $100. Also how much of a tax policy change reach to the same results?
- Q)If the MPC .8 and we have a 200B GDP Gap, how much will initial expenditures need to increase to bring the economy to full employment GDP.The marginal propensity to save is 0.2. Equilibrium GDP will decrease by $50 billion if the aggregate expenditures schedule decreases by Multiple Choice $10 billion. $250 billion. $25 billion. $5 billion.Determine the net impact upon the nation's economy that results from equal increases in government spending and taxes of $10 billion when the MPC is .8. Show your work.
